Warehouse – Distributor CPro Case Study

CPro Case Study: Multistate Warehouse/Distributor


warehouseA warehouse/distributing company with operations in multiple states, following two years of high workers’ compensation claims, had turned the corner on the problem by hiring a loss claims specialist and installing an effective loss prevention program.

Claims dropped by more than half during the next two years, but workers’ comp premiums continued to escalate, regardless.


  • Past 5 years with same carrier.
  • Annual claims for five years prior to beginning loss control program averaged $523,000.
  • Annual claims for two years following implementation of loss control program averaged less than $250,000.
  • Experience modification (Xmod) for the 2013 plan year was 1.66.
  • $50,000 plan deductible.
  • Insured desired premium relief in keeping with its loss reductions.
  • Insured wanted to increase operating flexibility by eliminating the requirement for a letter of credit (a letter of credit could impair its ability to borrow for other business reasons).


To realize premium savings that would reflect the current and future success of the insured’s loss reduction program, CPro recommended a multi-year, loss-sensitive workers’ compensation plan with a national carrier. This plan had no deductible, and it completely eliminated the requirement for a letter of credit, which helped improve the insured’s credit and cash flexibility.


  • CPro’s estimated first year plan premium was $1,012,000, slightly lower than the estimated renewal cost from the incumbent carrier ($1,057,000).
  • Claims activity for the first year of the CPro plan (2013) were in line with expectations, coming in at $260k.
  • Over the first year, the insured experienced a healthy payroll increase, and claims continued to drop relative to payroll. These two changes reduced the first premium to $920,000 for the CPro plan, but increased the plan for the incumbent carrier to an estimated $1,425,000 – a whopping $505,0004 saving in just the first year!
  • Because the CPro program is for a period of 3 years and is loss-sensitive, it can continue to generate additional premium savings with good performance by the insured.
  • The insured budgeted at 90% of maximum expected loss for the 2013 plan year, but because the actual incurred losses dropped to such an astounding rate, the insured was able to realize an exceptionally nice cash flow adjustment, due to lower premiums.
  • Experience modification remained stable, dropping slightly from 1.66 to 1.64. With losses dropping and payroll increasing, this insured will see a significant drop in the Xmod rate in subsequent years.
  • Thanks to the carrier’s flexibility, the multi-year nature of the insurance product and the insured’s strong performance the outlook is favorable for additional premium reductions in subsequent years.


$1,057,000          2013 projected incumbent carrier renewal premium

$1,425,000          2013 incumbent carrier adjusted renewal premium

$1,012,000          2013 projected CPro loss-sensitive plan premium

$   920,000          2013 adjusted CPro loss-sensitive premium

$   505,000          First year total savings, PLUS no letter of credit required!

Call CPro at 972-598-0401 to get the advantages of multi-year, loss-sensitive workers’ compensation insurance plans working for your clients.

About CPro Associates, Inc.

  • National footprint – serving all 50 states
  • 46+ years experience in commercial workers’ compensation insurance
  • 15 top carriers
  • Specialists in multi-year, loss-sensitive workers’ compensation coverage
  • We will make joint presentations to help you work more effectively
  • We conduct a full plan review with the insured’s agent each year
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